The Pension Board of Worcestershire Council met on Friday 4 September 2026 to review the fund's annual report, business plan, and risk register. Discussions were scheduled to cover the pension fund's financial performance for the year ending 31 March 2026, its operational plans for the upcoming year, and an update on identified risks.

Pension Fund Annual Report for the Year Ended 31 March 2026

The Board was scheduled to review the Pension Fund's Annual Report for the year ending 31 March 2026. The report highlighted a significant increase in the fund's net assets, which rose from £4,016.2 million to £4,552.6 million. Key achievements noted included a strong investment return of 14.7%, growth in scheme membership to 74,200, and a funding level of 127% following the 2025 actuarial valuation. The report also detailed progress on responsible investment and climate-risk management, alongside the transfer of investment implementation responsibilities to LGPS Central.

The report indicated that the fund is fully compliant with the Government's Fit for the Future reforms and the requirements of the Pension Schemes Act 2026. It also highlighted strong pensions administration performance, with minimal backlogs and the achievement of average turnaround targets across standard processes. Digital services have expanded, with 51.2% of active members registered for the member portal.

Business Plan

The Board was scheduled to review the Worcestershire Pension Fund Business Plan for 2026/2027. This plan is designed as a comprehensive reference for activities within the fund and the wider Local Government Pension Scheme (LGPS) landscape. Amendments were made to clarify how the fund's structure supports its aims and objectives. The plan includes a work plan for 2026/2027, detailing regular and ad hoc deliverables across administration, governance, and investments.

Updates on administration indicated that most KPIs were broadly in line with targets, though some were impacted by external factors such as revised SCAPE factors and the transition to a new payment system. There were no reported cases to The Pensions Regulator (TPR) since the last update. The McCloud remedy work was progressing, with rectification for pensioners and transfers completed, and work ongoing for deceased members awaiting information from external parties. Preparations for Pensions Dashboards were also advancing, with successful connection to the Integrated Service Provider and ongoing data quality improvements.

The plan also outlined progress on Survivor Pension Equalisation and the removal of the age 75 limit on Death Grants, with specific deadlines and current progress detailed. A review of AVC arrangements and legal services was underway, with initial documentation received and terms from potential new AVC providers being sought. Councillor and Mayor access to the scheme was being implemented, with dedicated forms and website information created. Year-end processes for Annual Benefit Statements were progressing, with a high percentage of active member records ready for distribution. The Fit for the Future reforms were being implemented, with an Independent Person appointed and a Senior LGPS Officer to be appointed.

Risk Register

The Board was scheduled to review the Worcestershire Pension Fund Risk Register for August 2026. The register categorises risks into Compliance and Legal, Operational and Technological, Engagement, Pooling, and Investment. Four changes were identified from the previous iteration:

• Compliance and Legal Risk 1 and Risk 2: The impact of these risks was reassessed as Moderate (from Low) due to pending training completion. This will be reviewed again next quarter.
• Compliance and Legal Risk 5: The cause of this risk was amended following the appointment of the LGPS Senior Officer and the completion of policy updates required for Fit for Future compliance.
• Engagement Effectiveness Risk 13: The internal control/mitigations narrative was updated to reflect the 2026 member survey, which seeks feedback on service usage and areas for improvement.

The review resulted in an increase in the score for Compliance and Legal Risks 1 and 2 from 5 to 6, but this did not change the overall Red, Amber, Green (RAG) risk rating. Mitigating actions for these risks remain unchanged, with reminders issued to Board and Committee members regarding training completion.

Governance and Compliance Update

The Board was scheduled to review the Governance and Compliance Update. This included noting the Hymans General Code Report, Cyber Impact Analysis, Breaches of Law Policy, Personal Data Retention Policy, Under and Overpayment Policy, and Cyber Incident Simulation Slides.

The General Code review indicated that the Fund is broadly compliant with The Pensions Regulator's General Code of Practice, with 104 out of 134 requirements assessed as fully compliant. Areas for improvement were identified, and an action plan is being developed.

The Cyber Security Review involved an independent Cyber Impact Analysis and a cyber war game exercise. Findings and recommendations are being reviewed to enhance the Fund's cyber resilience. Policy reviews for Breaches of Law and Personal Data Retention have been completed, with updates reflecting new legislation such as the Data (Use and Access) Act 2025.

Topical updates included information on Local Government Reform (LGR), which will see Worcestershire transition to a two-unitary authority model from 1 April 2028. Officers are assessing the impact on the Fund. The Data (Use and Access) Act 2025 introduces new requirements for handling data subject complaints, which will operate alongside existing Internal Dispute Resolution Procedure (IDRP) arrangements.

Good Governance developments included the appointment of Mandy Kaur-Sadler as the Independent Person and Sherief Loutfy as the LGPS Senior Officer. Procurement for the Independent Governance Review is due to commence in early 2027.

Communications and Training Update

The Board was scheduled to review the Communications and Training Update. This included an overview of communication activities such as Annual Benefit Statements, a member survey, an investment survey, and the consultation on the Investment Strategy Statement. Website usage insights indicated members are primarily seeking support and access to services. Member portal registration levels showed a steady increase across all categories.

Training updates included Pensions Basics sessions for active members, with positive feedback received. The Pensions Team attended an away day with a cyber security session. Board and Committee members were reminded of available training opportunities, including the LGPS Online Learning Academy (LOLA) modules and pre-meeting training sessions. The upcoming Hymans Robertson National Knowledge Assessment was also highlighted.

Forward Plan

The Board was asked to comment on and approve the proposed Forward Plan, which outlines anticipated future reporting items. This includes updates on Investment Governance, the Annual Report, Funding Strategy, UK Stewardship Code, Business Plan, Administration Strategy, Investment Strategy Statement, Climate Change Risk Strategy, Training, Budget, Risk Register, Governance Update, Independent Person Update, and regulatory updates from the Scheme Advisory Board. The plan noted that it may be subject to change due to forthcoming government-led regulatory changes to the LGPS.